We’ll overcome deficit setback – Ofori-Atta

Finance Minister, Ken Ofori-Atta, says the country will emerge stronger from its economic malaise

Finance Minister, Ken Ofori-Atta, has said the country will emerge stronger from its economic malaise, as the new government works to restore fiscal discipline and policy credibility.

The Minister told journalists last Friday that although his government inherited a budget deficit of about 10 percent – wider than the 5.3 percent that was agreed with the International Monetary Fund (IMF), he is confident the country will bounce back stronger.

Mr. Ofori-Atta, who has been in the position since last week, said government is currently undertaking an audit of the economy it inherited from the erstwhile National Democratic Congress’ government, to get a clear picture of the state of play.

“We are still in the validating stage. So, in the end we don’t know the full quantum of it, but whatever it is it enables you to now have discussions with the IMF which may bring new solutions as to what the programme will be like. So, I think we are in the discovery stage. I mean, clearly, it is a setback of some sort but I suspect we will find solutions to it as we grab hold of it.”

Mr. Ofori-Atta added that, “We are hopeful because we believe that we can restore policy credibility and we would be able to enforce the public financial management act to restore the discipline that is required to stabilise the economy.”

According to him, in addition to fostering fiscal discipline, particularly with the passage of the much-touted Fiscal Responsibility Act, economic growth that will see the creation of jobs will be high on the agenda.

“We are talking about growth that will create jobs and then really create what I would call economic freedom so that private enterprise will thrive and also create environment for external resources in terms of partnership to come into Ghana for us to get the growth we need,” the Finance Minister added.

The New Patriotic Party government promised a raft of tax cuts to provide relief to the private sector as a means to stimulate economic growth.

Mr. Ofori-Atta reiterated government’s resolve to see the tax cuts through, saying: “We made a pledge in our manifesto that we will do that and we think quite a number of them are what we call nuisance taxes.

So, we certainly will. It is a mix of things, from levies to exemptions to capital gains tax, and we are going to calculate to see which ones will be most effective. But, certainly, in the budget, we will lay it out and you will see some tax reductions,” he added.